Historical Background of Home Development Fund or Pag-IBIG Fund

The birth of the Home Development Mutual Fund (HDMF), more popularly known as the Pag-IBIG Fund, was an answer to the need for a national savings program and an affordable shelter financing for the Filipino worker. The Fund was established on 11 June 1978 by virtue of Presidential Decree No. 1530 primarily to address these two basic yet equally important needs. Under the said law, there were two agencies that administered the Fund. The Social Security System handled the funds of private employees, while the Government Service Insurance System handled the savings of government workers. Less than a year after on 1 March 1979, Executive Order No. 527 was signed. The order directed transferring the administration of the Fund to the National Home Mortgage Finance Corporation, which was one of the operating agencies of the then Ministry of Human Settlements. Seeing the need to further strengthen the stability and viability of the two funds, Executive Order No. 538 was issued on 4 June 1979, merging the funds for private and government personnel into what is now known as the Pag-IBIG Fund. However, it was only on 14 December 1980 when Pag-IBIG was made independent from the NHMFC with the signing of PD 1752, which amended PD 1530. With the improved law in effect, the Fund's rule-making power was vested in its own Board of Trustees. Likewise, PD 1752 made Pag-IBIG membership mandatory for all SSS and GSIS member-employees. Months after former President Corazon Aquino assumed leadership in the country, PAGIBIG Contributions were suspended from May to July 1986. On August 1, 1986, she directed the resumption of PAG-IBIG membership under Executive order No. 35. Membership was still mandatory basis but under more liberal terms. The employee and employer rates were reduced, and the maximum fund salary was raised from P3,000 to P5,000. January 1, 1987 marked the return of the PAG-IBIG Fund to a voluntary program under Executive Order No. 90. It was during the years as voluntary fund that PAG-IBIG introduced innovative benefit programs that heeded the calls for expansion of membership, and addressed the immediate financial as well as housing needs of its members.

Goals 1. with contributory support of the employers. More than a decade after Republic Act 7742 was implemented. 7742 which became effective on January 1. To provide affordable housing finance to the Fund¶s members to enable them to meet their housing needs. 9679 or the Home Development Mutual Fund Law of 2009 on July 21. Mission To uplift the quality of life of the members through savings. 2009. To motivate the employed and other earning groups to save. through an integrated nationwide provident savings system. 2. including Filipinos employed by foreign-based employers. PAG-IBIG membership reverted to mandatory on June 17. This law made PAG-IBIG membership mandatory for all. 1994 when former President Fidel V. Vision To be the premier and globally competitive provident and financial institution. . 1995. Ramos signed Republic Act No. former President Gloria Macapagal-Arroyo signed into a law Republic Act No. the PAG-IBIG fund.After eight years as a voluntary fund.

whether they are deployed here or abroad or a combination thereof.Membership A. y Employees of an employer who is granted a waiver or suspension of coverage by the Fund under RA 9679. y Filipinos employed by foreign-based employers. or their wholly-owned instrumentality based in the Philippines. in the absence of an administrative agreement with the Fund. or ceased to be selfemployed but would like to continue paying his personal contribution. Barangay Council Members. provided they comply with the set rules and regulations for Pag-IBIG members including the amount of contribution and schedule of payment. and the Philippine National Police. including Barangay Chairmen. Chairmen of the Sangguniang Kabataan. investor. Mandatory Membership y y Employers and employees who should be covered by the SSS and the GSIS. or any other individual with passive income or allowances. Uniformed members of the Armed Forces of the Philippines. the Bureau of Fire Protection. B. . Voluntary Membership Membership to the Fund is also open to individuals 18 to 65 years old. unless they also engage in another vocation or employment which is subject to mandatory coverage. y Public officials or employees who are not covered by the GSIS such as Barangay Officials. Bureau of Jail Management and Penology. A member separated from employment. and Barangay Secretaries and Treasurers. y Filipino employees of foreign government or international organization. This may include the following: y Non-working spouses who devote full time to managing the household and family affairs. y y Leaders and members of religious groups. Such member may be a pensioner. local or abroad.

membership begins only upon the said date as evidenced by Pag-IBIG Fund receipt. Requirement for Application of Pag-IBIG Membership y One Valid ID. Thus. . Armed Forces of the Philippines ID Integrated Bar of the Philippines ID Senior Citizen Card Overseas Workers Welfare Administration ID Overseas Filipino Worker ID Seafarer¶s Identification and Record Book Postal ID Voter¶s ID Membership with the Fund becomes official only upon remittance of the first monthly membership contribution.y Such other earning individuals or groups as may be determined by the Board by rules and regulations. which may be any of the following o o o o o o o Company ID Passport Driver¶s License Professional Regulation Commission ID Social Security System Card Government Service Insurance System e-Card Government Office and GOCC ID  o o o o o o o e.g.

ph. The maximum monthly compensation to be used in computing the employee and employer contributions shall not be more than P5.500 and below Over P1. otherwise recover from the employee the employer¶s contribution. Present system-generated MDF and pay Membership Contribution. The employer is not entitled to deduct from wages or remuneration of or.Membership Registration 1.000. Accomplish and submit on-line membership registration form.0% 2. . 3. Proceed to the nearest Pag-IBIG NCR/Regional Branch or any extension service office or field service center. Print system-generated Membership Data Form (MDF) reflecting Registration Tracking Number . Said employee may opt to pay the employer counterpart. except for non-working spouses of Pag-IBIG members.0% 2.500 1.0% 2. shall be as follows: Monthly Compensation Contribution Rate Employee Employer (if any) P1.00 Employer shall remit 2% of the monthly compensation of the contributing member as counterpart contribution.gov. Log on to Pag-IBIG Fund website at www. Member Contribution The contribution of all members.0% A Filipino employee working abroad and whose employer is not subject to mandatory coverage shall contribute an amount equivalent to 2% of his or her monthly compensation. 2.pag-ibigfund. 4. 5.

For those who want to contribute per month.A Non-Working Spouse of a Pag-IBIG member shall contribute as follows: 50% of Working Spouse¶s Monthly Compensation Contribution Rate P1.500 and below Over P1. Duration of Pag-IBIG Membership Membership with the Fund shall be for a term of 20 years with a total of 240 monthly membership contributions or upon the occurrence of any of the following grounds for membership termination: y y y y y y Membership term maturity Death Retirement Permanent Total Disability or Insanity Termination from service by reason of health Other causes as may be provided for by the Board of Trustees .500 1. Other members may pay directly to the Fund through any of its authorized agents. Pag-IBIG Overseas Program (POP) members shall remit in accordance with the rates herein prescribed. contributions must be remitted on or before the 10th day of the following month. The employees shall have the responsibility to remit said contributions to the Fund on a monthly basis.0% 2. remittance must be made on or before the 10th day of the first month of the following quarter. a member may contribute more than what is prescribed.0% Notwithstanding the said contribution rates. For quarterly contributions. Remittance of Contribution to the Fund Formally employed members shall contribute through salary deduction.

whichever is applicable. medical. penalties and charges. purchase of appliance and furniture and other needs. y If with existing calamity loan. shall be deducted from the proceeds of MPL. . a member shall be allowed to avail of the MPL only after payment of at least six monthly amortizations. with at least five monthly contributions for the last six months. Loan Renewal y With payment of at least six amortizations. livelihood. together with any accrued interests. y An active member at the time of loan application. The outstanding balance. Short-Term Loan (STL) Program a. y Member-applicant¶s net take home pay shall not fall below the minimum requirement of the General Appropriations Act (GAA) or company policy. An active member at the time of loan application. b. y Member-applicant¶s net take home pay shall not fall below the minimum requirement of the General Appropriations Act (GAA) or company policy. as declared b the Office of the President or the Sangguiniang Bayan. Borrower Eligibility New Loan y y With at least 24 monthly contributions. together with any accumulated interests. penalties and charges. shall be deducted from the proceeds of the new loan. with at least five monthly contributions for the last six months. education.) Multi-Purpose Loan Program (MPL) ± this program aims to provide financial assistance to Pag-IBIG members for purposes of minor home improvement. The outstanding balance.) Calamity Loan Program ± This program aims to provide financial assistance to PagIBIG Fund member-victims in calamity-stricken areas. whichever is applicable.List of Pag-IBIG Programs and Services A.

shall be deducted from the proceeds of the calamity loan. shall be deducted from the proceeds of the new loan. the borrower may renew his calamity loan any time.Borrower Eligibility New Loan y y With at least 24 monthly contributions. y y A resident of the calamity-stricken area. penalties and charges. An active member at the time of loan application. attesting that it is . including landlords. if not member of association. Loan Renewal y Should another calamity occur in the same area. together with any accrued interests. penalties and charges. fisher folks and livestock farmers y Certification from the Municipal Agricultural Office that their products were damaged or killed due to calamity. with at least five monthly contributions for the last six months. whichever is applicable.) For formally-employed members y Declaration of Being Affected by Calamity 2. Additional Requirements for Calamity Loan 1. the outstanding balance. 3. Availment Period The member must avail of a loan under the program within a period of 90 days from the occurrence of the calamity. The outstanding balance of his existing loan. If with existing MPL.) For farmers. together with any accrued interests. y Member-applicant¶s net take home pay shall not fall below the minimum requirement of the General Appropriations Act (GAA) or company policy.) For business owners or market investors y Certification from Market Vendors Association or certification from Municipal Mayor.

) For Pag-IBIG Members or any of his immediate family members affected by diseases such as diarrhea.) Retirement ± the members shall be compulsorily retired upon reaching age 65. the GSIS or a separate employer provident or retirement plan.engaged in selling of farm products. which consists of the member¶s accumulated contributions. heat stroke. cholera. 15 or 20 years. He may. meat or fish and his source of livelihood was affected by calamity.) Membership Maturity ± the member must have remitted at least 240 monthly membership contributions with the Fund. paralytic shellfish poisoning (red tide bloom). chickenpox. if any. Provident Benefits Claim Pag-IBIG Fund guarantees the refund of the member¶s Total Accumulated Savings (TAV).) Permanent and Total Disability or Insanity ± the following disabilities shall be deemed total and permanent y Temporary total disability lasting continuously for more than 120 days. heat exhaustion. depending on the option of the member upon membership registration. however. y Complete loss of both eyes. measles and hypertension y Medical Certificate from the doctor and such occurrence was caused or aggravated by the said calamity. 10. B. and the dividend earnings credited to the member¶s account of any of the following grounds of withdrawal: 1. the employer counterpart contributions. . opt to retire upon the occurrence of the following: y Actual retirement from SSS. vegetable. 3. membership with the Fund shall be at the end of 5. skin diseases. provided that member has at least reached 45. y Loss of two limbs or over the ankle or wrist. 2. y Brain injury resulting in incurable imbecility or insanity y Such other causes which are adjudged to be total and permanent disability by duly licensed physician and approved by Board of Trustees. y Upon reaching the age 60. For the Pag-IBIG Overseas Program (POP) members. 4. heat cramps.

Disenteng Buhay´ Program (Circular No.) Purchase of a fully developed lot not exceeding one 1. which will enhance its durability and material value. a member may avail of a loan to finance any of the following: a. Buyers who are opting to pay through housing loan enjoy 6% interest rate for the entire term of loan. 266) Under this program. b. or y An acquired asset. which is disposed of through sealed public bidding.) Permanent departure from the country 6.000 square meters.4. . initially to government employees. negotiated sale. inclusive of a parking slot. d. or the Rent-to-Own Program. Discounts of 15% to 20% are given to interested buyers who will purchase properties through housing loan and through cash payment. The unit may be y Old or brand new y A property mortgaged with the Fund. c. Housing Loans a.) Purchase of a residential house and lot.) Home improvement y Like any alteration in an existing residential unit intended by a homeowner to be a permanent integral part of the property. townhouse or condominium unit. C.) Separation from service due to health reason. respectively. which should be within a residential area b. 5. at reduced rates.) End-User Financial Program (Circular No.) Death ± the Fund benefits shall be divided among the member¶s legal heirs in accordance with the New Civil Code as amended by the Family Code. the Fund¶s acquired assets are put up for sale. An additional discount of 5% is granted to the buyers if the properties they are acquiring are illegally occupied.) Construction or completion of a residential unit on a lot owned by the member. 247) Under the End-User Financing Program. ) ³Maagang Pabahay.

Has no outstanding Pag-IBIG housing loan. Must be a member under the Pag-IBIG I for at least 24 months. whether old or new. a member must satisfy the following requirements: 1.) Combination of loan purposes. or subjected to dacion en pago.) Refinancing of an existing mortgage with an institution acceptable to the Fund. 4. y Refinancing of an existing mortgage with home improvement. Has the legal capacity to acquire and encumber real property. y The said loan has a repayment history of at two years with the original mortgagee f. y Purchase of a residential unit. A member whose multi-purpose loan is in arrears shall be required to pay his arrears over the counter to update his account. 3.000square meters and construction of a residential unit thereon. as evidenced by the remittance of at least 24 monthly contributions at the time of loan application. Has not availed of a Pag-IBIG housing loan that was foreclosed. May have an outstanding Pag-IBIG multi-purpose loan but which is updated in payments at the time of loan application. provided that: y The loan is not in default within the 12 months prior to the date of application. 7. To qualify for a Pag-IBIG housing loan. 6. 2. bought back due to default. which shall include cases where the borrower is no longer interested to pursue the loan and surrenders the property. provided further that he is not more than 70 years old at loan maturity.e. . with home improvement. 5. cancelled. Not more than 65 years old at the date of loan application and must be insurable. either as a principal borrower or coborrower. which shall be limited to the following: y Purchase of a fully developed lot not exceeding 1. Has passed satisfactory background/credit and employment/business checks conducted by the developer and the Pag-IBIG Fund.

2316) and latest one month payslip 3. Housing Loan Application with recent ID photos of borrower 2. For locally-employed. y Commission vouchers reflecting the issuer¶s name and contact details (for the last 12 months) y Bank statements or passbook for the last 12 months (in case income is sourced from foreign remittances. For Overseas Filipino Workers y y Employment Contract (with English translation if in foreign language) Original Employer¶s Certificate of Income (with English translation if in foreign language). If document submitted is photocopy. Membership Status Verification Slip 3.3.Documents Required Upon Loan Application 1.2. Proof of Income 3. For Self-Employed/Other Sources of Income y ITR. it shall be duly . and Official Receipt of tax payment from bank supported with DTI Registration and Mayor¶s Business Permit.1. any of the following: y y Notarized certificate of employment and compensation (Pag-IBIG format) Notarized certificate of employment and compensation (Employer¶s format) y Income Tax Return or Certificate of Tax Withheld (BIR Form No. pensions. etc. Audited Financial Statements. LTFRB for other Public Utility Vehicles) y y Certificate of Engagement issued by owners of business Other documents that would validate sources of income 3.) y Copy of Lease Contract and Tax Declarations (if income is rental payments) y Certified True Copy of Transport Franchise issued by appropriate government agency (LGU for tricycles.

6. For OFWs. 4. Photocopy (back-to-back) of one valid ID of principal borrower and spouse. shall be duly validated and certified or imitated by HDMF Information Officer assigned in the country where the member works. Birth Certificate or any proof of relationship if with co-borrower/s or family members included on computation of aggregate income. Contract to Sell or similar agreement between buyer and seller. co-borrower/s. spouse. co-borrower and spouse. Special Power of Attorney notarized to date of departure or duly certified and authenticated by the Philippine Embassy or Consulate in the country where member is staying. if abroad. 7. if applicable. and attorney-in-fact. 9. 5. . y Other proofs of Income. The same ID must be presented during the conduct of borrower¶s validation. Loans over P2. Insurance Coverage a.validated and certified/initiated by HDMF Information Officer assigned in the country where member works. 8. OFW members over 60 years old ii.0 M and aged up to 60 years old. Authorization to Conduct or Credit Background Investigation. Marriage Contract (for all married borrower/s. whether original or photocopy.0 M to P3. Health Statement Form (Medical Questionnaire) i. family member/s included on the computation of aggregate income) 10.

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